Dive Brief:
- SodaStream needed a turnaround, and rebranding as a sparkling water maker has put the fizz back into company profits, which came in at a $2.8 million gain as compared with an $8.2 million loss last year. Company restructuring efforts also contributed to the profit increase.
- For the fourth quarter which endedDec 31, of last year,revenue still hasn't fully recovered, having fallen11% to $112.9 million. SodaStream said those sales were about flat after removing currency impacts.
- "There is still work ahead of us in order to position the company for consistent profitable growth, but I am confident that our recent actions have us heading in the right direction,"CEODaniel Birnbaum said on a call with investors Thursday.
Dive Insight:
Theabout-facein company branding attempted to do away with SodaStream's positioning as a soda dispenser at a time when consumers are dropping soda in favor of beverages they deem healthier with less sugar. Now the company positions itself as a sparkling water machine in the better-for-you beverage space and featuresexotic flavors, such asraspberry lychee rose. Birnbaumcalledsparkling water "the future of beverage" in an interview with Bloomberg last year and said that the company had been "on the wrong strategy," referring to soda.
This may have been the sparkling solution SodaStream needed as the company struggled in the past year. In the previous quarter, the company's profitsank76%, and revenue fell 13%, which was still an improvement over larger sales declines in prior quarters. SodaStream hasn't turned its back on soda altogether, havingsignedan expanded distribution deal with PepsiCo in September.
Sparkling watersalesin U.S. multi-outletsjumped16.2% to more than $1.4 billion for the year ending July 12, according to IRI. Sparkling water is a way for soda lovers to retain the carbonated mouthfeel of soda.
